fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

Threadneedle UK Equity Income Z GBP

Targets both capital growth and income from FTSE 100 and FTSE 250 stocks.

  • 133.20p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 182.69p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.82%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 3.20%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 23 November 2020, fund data last updated 08 October 2015

This fund aims to maximise capital growth whilst also providing enough income to meet the yield requirement of the IA UK Equity Income sector (a yield 10% above that of the UK stockmarket). Manager Richard Colwell invests predominantly in large and mid-cap UK equities, forming his portfolios through a combination of macro-economic themes and fundamental stock analysis. He tends to take a fairly balanced approach, unlike certain peer group funds which can be more aggressively or defensively positioned.

Fund summary

Sector UK Equity Income
Structure OEIC
Launched October, 2012
Size £3,414m
Yield 3.20%
Charging basis Capital
Dividends paid 7 Feb, 7 May, 7 Aug, 7 Nov

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.75%
Ongoing charges figure 0.82%

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Investment process

This is an unconstrained UK multi-cap portfolio, though in practice almost all investments are in FTSE 100 and FTSE 250 stocks - exposure to small caps is limited. Although the fund is guided by the house thematic and macro-economic views, the manager has a strong preference for fundamental stockpicking. This fund is managed in a flexible manner and benefits from an experienced UK desk, where the team double up as fund managers/analysts and carry out over 800 company meetings a year. The manager has a preference for companies with ‘solid’ management and generally steers clear of weak balance sheets. He also places a premium on companies which are able to generate a high level of cashflow. Yield is targeted at the portfolio level, so non dividend-paying recovery situations sometimes feature. The portfolio tends to have a fairly balanced structure – the manager sometimes tilts it in favour of defensive or cyclical stocks based on the macro view, but avoids aggressive skews.

This is a core fund for equity income investors. Colwell takes a “plain vanilla” approach, investing purely in UK stocks, shunning derivatives and avoiding the strong style biases that we sometimes see in the UK Equity Income sector. He enjoyed a successful period on the fund as co-manager alongside Leigh Harrison from 2010 before stepping up to lead manager in 2015. With Harrison retiring in 2016, the UK team maintains its strength in depth with typically strong performance across the board. Colwell also has a strong track record in his own right.

Manager research

Average monthly relative returns

  • 15/16 0.05%
  • 16/17 0.00%
  • 17/18 -0.06%
  • 18/19 0.21%
  • 19/20 -0.27%

Bestinvest MRI

  • 3 years -0.04%
  • 5 years -0.01%
  • Career 0.11%
  • 3 years 55.20%
  • 5 years 62.90%
  • Career 98.80%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Richard Colwell

Colwell joined Threadneedle in January 2010, having previously been at Aviva from January 2007. Previously, he worked as a fund manager at Credit Suisse Asset Management from 2002 and was responsible for a range of institutional pension funds, the Sun Life of Canada closed funds, as well as retail portfolios. He started his investment career at Schroders as a pharmaceuticals analyst, then becoming a portfolio manager for five years. He joined the industry from the Bank of England. He holds a BA (Hons) in Banking & Finance and is an associate member of both the IIMR and CIB.

Track record

Richard Colwell has 15.6 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.11%. During the worst period of relative performance (from February 2016 - December 2017) there was a decline of 8% relative to the index. The worst absolute loss has been 39%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 99%.

Periods of worst performance

Absolute -39.00% (October 2007 - February 2009)
Relative -8.00% (February 2016 - December 2017)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 May 2020

10.9% Astrazeneca Plc
7.3% Glaxosmithkline
5.4% Rentokil Initial Plc
5.3% Electrocomponents Plc
4.6% Imperial Brands Plc
4% Phoenix Group Hldgs
4% Unilever
4% Morrison(Wm.)Supermarkets
3.5% Rsa Insurance Group Plc
3% 3i Group Plc
Source: Trustnet

Sector breakdown

Industrials 27.00%
Consumer Services 19.00%
Health Care 18.00%
Financials 14.00%
Consumer Goods 11.00%
Utilities 3.00%
Oil & Gas 2.00%
Telecommunications 2.00%
Basic Materials 2.00%
Cash & Cash Equivalents 1.00%

Portfolio

45-60 stocks with low turnover.

Constraints

Typical sector weights +/-11% versus benchmark, stock weights +/-5%.

Key Investor Information - Income

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Key Investor Information - Accumulation

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